Siti Cable plans to raise Rs 680 crore, pick up stakes in 7 MSO's

Essel Group firm Siti Cable Network has agreed to acquire varying amounts of equity stakes in as many as seven multi system operators in a move to increase its market share and presence.

One of the operators is the Mumbai based cable and television service provider Scod 18 Networking, in which Siti Cable is planning to pick up a 76 per cent stake.

It has also acquired equity stake of 51% stake each in Vadodara based-Sai Star Digital Media, New Delhi based-Bargachh Digital Communication Network and Chittoor based-Krishna Teja Digital Entertainment. It has also acquired 100 per cent stake in Variety Entertainment which will help to increase its penetration in Hyderabad markets. Additionally, the company is also planning to acquire 49 per cent stake each in New Delhi based-Siti Faction Digital and Siti Jony Digital Cable Network.

The company is also planning to raise up to Rs. 680 crore through issuance of warrants and optionally fully convertible debentures in a move to increase capital to cut on the debt. According to sources,  the funds will also be used to strengthen internal sources and fund the organization's future expansion plans.

"The Board of Directors of the company... approved subject to shareholders' approval issuance of 14,28,57,143 number of warrants convertible at option of the holder in one or more tranches into equivalent number of equity shares of Re 1/ each of the company to M/s Direct Media & Cable Pvt Ltd and/or Arrow Media & Broadband Pvt Ltd, entities forming part of promoter/promoter group of the company at Rs. 35 per warrant…so that the total value of warrants shall not be more than Rs. 500 crore,"  the company said in a BSE filing.

It also plans to issue 51,428,571 number of OFCDs of face value of Rs 1 each convertible at the option of the holder, in one or more tranches into equivalent number of equity shares of Rs 1 each of the company to M/s Digital Satellite Media and Broadband Pvt Ltd at Rs 35 per OFCD so that the total value of the OFCDs so issued will not be more than Rs 180 crore

The company has also proposed for an Extra-ordinary General Meeting on February 4. Siti Cable is currently trading at levels of Rs. 34.85 on National Stock Exchange.